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Civil Litigation Dicta - Costs - Where Orders Premature. 1417217 Ontario Inc. v. River Trail Estates Inc.
In 1417217 Ontario Inc. v. River Trail Estates Inc. (Ont CA, 2024) the Ontario Court of Appeal allowed an appeal from a ruling involving oral real estate joint venture and several related issues.
Here the court holds that a trial judge's cost assessment was premature, where an ordered accounting had not yet been completed and offers to settle could not yet be properly considered:ISSUE 5 - The Interest and Costs Judgment must be set aside
[54] The trial judge ordered that an Associate Judge conduct an accounting to determine the final state of 141’s accounts, including any amounts that might be payable to Mr. Suleman or the Estate, and any amounts that each might owe to 141. Because it is unknown what monies, if any, one or more of the parties may owe 141, the trial judge erred in ordering the immediate payment of the Net Sale Proceeds by the Estate, and other of the Appellants, to 141. The unfairness of such an order is clear: since 141 has significant tax liabilities and no assets, if the order is complied with and the accounting proves the Estate’s set-off claims, there is no realistic possibility that any monies now paid will be recoverable.
[55] For similar reasons, the trial judge erred in making an order as to costs of the action at this time in the proceeding. The result in the proceeding and any offers to settle are the foundation for a trial judge’s exercise of discretion in awarding costs: r. 57.01 of the Rules. Until the accounting is completed, the results of the claim and counterclaim are unknown and offers to settle cannot be properly considered. Further, the trial judge could not decide the scale of costs because the parties’ conduct could not be fairly assessed absent the results of the accounting.
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